Forex - Aussie gains after domestic retail sales, China price data

Investing.com - The Australian dollar reversed course and gained smartly on Friday despite weaker than expected retail sales fell on Friday ahead of retail sales data as price data in China showed that a deflation trend remained at bay.

AUD/USD traded at 0.8141, up 0.23%, while USD/JPY changed hands at 119.52, down 0.11%.

Non-farm payrolls are seen posting 240,000 jobs in December and the unemployment rate is expected to edge down to 5.7% from 5.8%.

In Australia, the Aigroup construction index fell 1 point to 44.4, while November retail sales rose 0.1%, below the 0.2% gain expected.

China then said concumer prices rose 1.5% year-on-year, just above expectation of 1.4% and producer prices fell 3.3%, narrowly more than expected.

Later in the day, Japan's November preliminary indices of leading, coincident and lagging indicators are due at 1400 Tokyo (0500 GMT). The coincident composite index (CI), which reflects current business conditions, is expected to post the first fall in three months in November, down by around 1.1 points, after rising 0.6 points in October.

Overnight, tThe dollar was trading close to 12 year highs against a basket of major currencies on Thursday after data on initial jobless claims pointed to an ongoing recovery in the labor market as investors turned their attention to Friday’s nonfarm payrolls report.

The U.S. dollar index, which measures the greenback against a basket of six major currencies, fell 0.10% at 92.45.

The dollar remained supported after the Department of Labor reported that initial jobless claims fell by 4,000 to 294,000 last week, just slightly above expectations of 290,000.

The report came a day after data showing the U.S. private sector added a larger-then-forecast 241,000 jobs in December. The upbeat reports boosted the outlook for the U.S. recovery and raised expectations for a strong reading of the government nonfarm payrolls due on Friday.

The euro was at 10-year lows, with EUR/USD at 1.1779, the weakest since December 2005.